Exhibit 10.2
MASTER CREDIT AGREEMENT
-BETWEEN-
INFINITE FUNDING INC., AS LENDER
-AND-
DOMARK INTERNATIONAL INC., AS BORROWER
This MASTER CREDIT AGREEMENT ("Agreement") is entered into between INFINITE
FUNDING INC. as Lender ("Lender") and DOMARK INTERNATIONAL INC. as Borrower
("Borrower") as of March 2, 2012. The above entities may be collectively
referred to as the "Parties", and if referring to only one of the above
entities, a "Party."
RECITALS
WHEREAS, Borrower desires to borrow certain monies from time to time
pursuant to this Agreement in order to fund its business activities;
WHEREAS, Lender is willing to lend monies to Borrower pursuant to this
Agreement;
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. DEFINITIONS AND CONSTRUCTION
1.1 Definitions. As used in this Agreement, the following terms shall have
the following definitions:
"Advance" means a disbursement of monies pursuant to this Agreement.
"Affiliate" means, with respect to any Person, any Person that owns or
controls directly or indirectly such Person, any Person that controls or is
controlled by or is under common control with such Person, and each of such
Person's senior executive officers, directors, and partners.
"Borrowing Certificate" means a request for an Advance substantially in the
form set forth as Exhibit A hereto.
"Business Day" means any day that is not a Saturday, Sunday, federal
holiday or Texas state holiday.
"Debt" means all Indebtedness incurred pursuant to the Loan Documents.
"Evidence of "indebtedness" means a compilation of all Advances disbursed
to Borrower pursuant to this Agreement during the Borrower's last fiscal
quarter, substantially in the form set forth as Exhibit B hereto.
"GAAP" means generally accepted accounting principles as in effect from
time to time.
"Indebtedness"means any amount outstanding under this Agreement.
"Lending Facility" means the facility under which Borrower may request
Lender to fund Advances to Borrower, as specified in Section 2.1 hereof.
"Loan Documents" means, collectively, this Agreement, any Borrowing
Certificate, Evidence of Indebtedness, and any other agreement entered into
between Borrower and Lender in connection with this Agreement, all as amended or
extended from time to time.
"Material Adverse Effect" means a material adverse effect on (i) the
business operations or condition of Borrower and its Subsidiaries taken as a
whole, (ii) the ability of Borrower to repay the Debt or otherwise perform its
obligations under the Loan Documents, (iii) the validity or enforceability of
the Loan Documents, or (iv) the rights and remedies of Administrative Agent
under the Loan Documents.
"Maturity Date" means the date of maturity of the Advances disbursed
pursuant to this Agreement, which shall be one (l) year from the date of the
Evidence of Indebtedness evidencing such Advance(s).
"Permitted Indebtedness" means:
(a) any Indebtedness arising under this Agreement or any other Loan
Document;
(b) indebtedness pursuant to the Borrower's bylaws or in
indemnification agreements, to indemnify officers, directors and employees
of the Borrower;
(c) other indebtedness for borrowed money not be in excess of
$1,500,000 in any fiscal year;
(d) general trade debt or accounts payable to non-Affiliate creditors
incurred in the ordinary course of business, not in excess of $1,000,000 in
any fiscal year;
(e) any other indebtedness for borrowed money permitted by Lender.
"Person" means any individual, sole proprietorship, limited liability
company, partnership, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or governmental agency.
"Responsible Officer" means each of the Chief Executive Officer and Chief
Financial Officer of Borrower.
"Shell Company" means, with respect to the Borrower, that the Borrower has
no or nominal operations; and (i) either no or nominal assets; (ii) assets
consisting solely of cash and cash equivalents; or (iii) assets consisting of
any amount of cash and cash equivalents and nominal other assets.
"Subsidiary" means any corporation or partnership in which (i) any general
partnership interest or (ii) more than 50% of the stock of which by the terms
thereof ordinary voting power to elect the Board of Directors, managers or
trustees of the entity shall, at the time as of which any determination is being
made, be owned by Borrower, either directly or through an Affiliate.
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"Termination Date" means the date of termination of this Agreement in
accordance with Section 9.1.
1.2 Accounting Terms. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP and all calculations made hereunder
shall be made in accordance with GAAP. When used herein, the terms "financial
statements" shall include the notes and schedules thereto.
2. MANNER OF BORROWING AND TERMS OF ADVANCES
2.1 Amount of Lending Facility. Subject to the terms and conditions of this
Agreement, Lender agrees to make Advances to Borrower in an amount not to exceed
$150,000. This Lending Facility is not a revolving line of credit and monies
borrowed hereunder cannot be borrowed, repaid, and re-borrowed.
2.2 Manner of Borrowing. Until the Termination Date, Borrower may request
Advances under the Lending Facility as follows:
(a) From time to time, Borrower may submit via personal delivery,
electronic mail, or other commercially reasonable means, a Borrowing
Certificate in substantially the form of Exhibit B hereto to Lender no
later than 2:00 p.m. Houston, Texas time, on the Business Day prior to the
date that the Advance is to be made.
(b) Once the Borrowing Certificate is received and Lender is satisfied
as to the completeness of the same, Lender shall disburse the Advance to
Borrower in accordance with the Borrowing Certificate.
(c) On the last day of each fiscal quarter of Borrower, Lender may
issue an Evidence of Indebtedness in the name of Borrower setting forth the
Advances made to Borrower during such fiscal quarter (or in the CASE of the
first Evidence of Indebtedness issued hereunder, all Advances made since
the date of this Agreement).
2.3 Interest Rates, Payments, and Calculations.
(a) Interest Rate. Except as specified to the contrary in any Loan
Document, the Debt shall bear interest, on the amount outstanding, at a
rate equal to eight percent (8%) per year simple interest.
(b) Default Rate. All Debt shall bear interest, from and after the
occurrence of an Event of Default, at a rate equal to eighteen percent
(18%) per year simple interest.
(c) Term of Debt. Each Borrowing Certificate and the interest accrued
thereon shall be due one (1) year after the date of the Evidence of
Indebtedness.
(d) Computation. All interest chargeable under the Loan Documents
shall be computed on the basis of a three hundred sixty five (365) day year
for the actual number of days elapsed.
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2.4 Payments. Borrower shall make payments directly to Lender in accordance
with the terms of each Borrowing Certificate. Upon request from the Borrower,
Lender shall also provide records showing the date and amount of all payments
received and the amount of the Debt
2.5 Term. This Agreement shall become effective upon execution by all
Parties and shall continue in full force and effect until the Termination Date.
2.6 Use of Proceeds. Borrower will use the proceeds of Advances for the
purpose of working capital and for general corporate purposes.
3. CONDITIONS OF ADVANCES
3.1 Conditions Precedent to Initial Advance. The obligation of Lender to
make the initial Advance is subject to the condition precedent that Lender shall
have received, in form and substance satisfactory to Lender, the following:
(a) this Agreement and a Borrowing Certificate, each duly executed by
Borrower;
(b) such other documents, and completion of such other matters, as
Lender may deem reasonably necessary or appropriate.
3.2 Conditions Precedent to all Advances. The obligation of Lender to make
each Advance, including the initial Advance, is further subject to the following
conditions:
(a) receipt by Lender of a Borrowing Certificate as provided m Section
2.1;
(b) each representation and warranty contained in Section 5 shall be
true and accurate in all material respects on and as of the date of such
Borrowing Certificate and on the effective date of each Advance as though
made at and as of each such date, and no Event of Default shall have
occurred and be continuing, or would result from such Advance.
The making of each Advance shall be deemed to be a representation and
warranty by Borrower on the date of such Advance as to the accuracy of the facts
referred to in subsection (c) of this Section 3.2.
4. REPRESENTATIONS AND WARRANTIES
Borrower represents, warrants and covenants as follows:
4.1 Due Organization and Qualification. Borrower and each Subsidiary is a
corporation duly existing and in good standing under the laws of its state of
incorporation and qualified and licensed to do business in, and is in good
standing in, any state in which the conduct of its business or its ownership of
property requires that it be so qualified.
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4.2 Due Authorization; No Conflict. The execution, delivery, and
performance of the Loan Documents are within Borrower's powers, have been duly
authorized, and are not in conflict with nor constitute a breach of any
provision contained in Borrower's certificate of incorporation or bylaws, nor
will they constitute an event of default under any material agreement to which
Borrower is a party or by which Borrower is bound. Borrower is not in default
under any agreement to which it is a party or by which it is bound, which
default could have a Material Adverse Effect.
4.3 Name; Location of Principal Executive Office. Borrower's correct legal
name is as set forth on the signature page hereof. The principal executive
office of Borrower is located at the address indicated in Section10 hereof.
4.4 Litigation. Except as previously disclosed by borrower in its filings
with the Securities and Exchange Commission ("SEC"), there are no actions or
proceedings pending by or against Borrower or any Subsidiary before any court or
administrative agency in which an adverse decision is reasonably likely to have
a Material Adverse Effect. Borrower does not have knowledge of any such pending
or threatened actions or proceedings.
4.5 No Material Adverse Change in Financial Statements. All financial
statements related to Borrower that have been delivered by Borrower to Lender
and Administrative Agent fairly present in all material respects Borrower's
financial condition as of the date thereof and Borrower's results of operations
for the period then ended. There has not been a material adverse change in the
financial condition of Borrower since the date of the most recent of such
fmancial statements submitted to Lender.
4.6 Government Consents. Borrower and each Subsidiary have obtained all
consents, approvals and authorizations of, made all declarations or filings
with, and given all notices to, all governmental authorities that are necessary
for the continued operation of Borrower's business as currently conducted;
except in each case where the failure of any of the foregoing to be true and
correct could not reasonably be expected to have a Material Adverse Effect.
4.7 Full Disclosure. No representation, warranty or other statement made by
Borrower in any certificate or written statement furnished to Administrative
Agent contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained in such
certificates or statements not misleading.
5. AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, until payment in full of the Debt,
Borrower shall do all of the following:
5.1 Good Standing. Borrower shall maintain its and each of its
Subsidiaries' corporate existence and good standing in its jurisdiction of
incorporation and maintain qualification in each jurisdiction in which the
failure to so qualify could have a Material Adverse Effect, provided that
Borrower and each of its Subsidiaries shall at all times be permitted to merge
with a Subsidiary (as long as Borrower remains the surviving entity) and acquire
substantially all the assets of a Subsidiary, and the Borrower shall at all
times be permitted to dissolve any inactive or dormant Subsidiaries.
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5.2 Government Compliance. Borrower shall comply, and shall cause each
Subsidiary to comply, with all statutes, laws, ordinances and government rules
and regulations to which it is subject, noncompliance with which could have a
Material Adverse Effect. Borrower shall maintain, and shall cause each of its
Subsidiaries to maintain, to the extent consistent with prudent management of
Borrower's business, in force all licenses, approvals and agreements, the loss
of which could have a Material Adverse Effect.
5.3 Financial Statements and Reports. Borrower shall maintain a standard
system of accounting in accordance with GAAP and (a) if Borrower has a class of
securities registered with the SEC pursuant to the Securities Exchange Act of
1934 ("Exchange Act"), Borrower shall file with the SEC such periodic reports as
are required by the Exchange Act, or (b) if Borrower does not have a class of
securities registered with the SEC pursuant to the Exchange Act, Borrower shall
post to the OTC Disclosure & News Service such filings as may be required by OTC
Markets Group, Inc. (or any successor entity) for companies reporting under the
OTC Pink current information tier (or a successor or substitute tier which
provides information comparable to such tier, as determined by the
Administrative Agent).
5.4 Taxes. Borrower shall make, and shall cause each Subsidiary to make,
due and timely payment or deposit of all material federal, state, and local
taxes, assessments, or contributions required of it by law, and will execute and
deliver to Administrative Agent, on demand, appropriate certificates attesting
to the payment or deposit thereof; and Borrower will make, and will cause each
Subsidiary to make, timely payment or deposit of all material tax payments and
withholding taxes required of it by applicable laws, including, but not limited
to, the Federal Insurance Contributions Act, Federal Unemployment Tax Act (and
any state counterparts), and local, state, and federal income taxes, and will,
upon request, furnish Administrative Agent with proof satisfactory to
Administrative Agent indicating that Borrower or a Subsidiary has ▇▇▇▇ such
payments or deposits; provided that Borrower or a Subsidiary need not make any
payment if the amount or validity of such payment is contested in good faith by
appropriate proceedings and is reserved against (to the extent required by GAAP)
by Borrower.
5.5 Further Assurances. At any time and from time to time, Borrower shall
execute and deliver such further instruments and take such further action as may
reasonably be requested by Administrative Agent to effectuate the purposes of
this Agreement.
6. NEGATIVE COVENANTS
Borrower covenants and agrees that, until payment in full of the Debt,
Borrower will not do any of the following, or enter into any agreement to do any
of the following:
6.1 Dispositions. Convey, sell, lease, transfer or otherwise dispose of
(collectively, a "Transfer"), or permit any of its Subsidiaries to Transfer, all
or any part of its business or property, other than (i) Transfers of inventory
in the ordinary course of business, (ii) Transfers of assets in the ordinary
course of business which have become worn out or obsolete or which are promptly
being replaced, and (iii) other Transfers of assets outside the ordinary course
of business in an aggregate amount not to exceed One Hundred Fifty Thousand
Dollars ($150,000) in any fiscal year.
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6.2 Shell Status. Become a Shell Company.
6.3 Debt. Create, incur, assume or be or remain liable with respect to any
indebtedness, or permit any Subsidiary so to do, other than Permitted
Indebtedness.
6.4 Distributions. Pay any dividends or make any other distribution or
payment on account of or in redemption, retirement or purchase of any capital
stock, or set apart any funds for the payment of dividends (other than dividends
payable in shares of Borrower's stock) on any class of shares of Borrower's
stock, or apply any of its funds, property or assets for, the purchase,
redemption, or other retirement o( or make any other distribution, by reduction
of capital or otherwise, in respect of any class of shares of Borrower's stock,
or with respect to any other funds or assets, without the prior written consent
of Administrative Agent.
7. EVENTS OF DEFAULT
Any one or more of the following events shall constitute an Event of
Default by Borrower under this Agreement:
7.1 Payment Default. If Borrower fails to pay when d11e and payable, or
when declared due and payable, any portion of the Debt (whether of principal or
interest);
7.2 Material Adverse Effect. If there occurs an event that has a Material
Adverse Effect;
7.3 Attachment. If all or any portion of Borrower's assets is attached,
seized, subjected to a writ or distress warrant, or is levied upon, or comes
into the possession of any trustee, receiver or person acting in a similar
capacity and such attachment, seizure, writ or distress warrant or levy has not
been removed, discharged or rescinded within ten (10) days, or if Borrower is
enjoined, restrained, or in any way prevented by court order from continuing to
conduct all or any part of its business affairs, or if a judgment or other claim
becomes a lien or encun1brance upon any portion of Borrower's assets, or if a
notice of lien, levy, or assessment is filed of record with respect to any of
Borrower's assets by the United States Government, or any department, agency, or
instrumentality thereof, or by any state, county, municipal, or governmental
agency, and the same is not paid within ten (10) days after Borrower receives
notice thereof;
7.4 Judgments. If a judgment or judgments for the payment of money in an
amount, individually or in the aggregate, the uninsured portion of which is at
least Three Hundred Thousand Dollars ($300,000), shall be rendered against
Borrower and shall remain unsatisfied and unstayed for a period often (10) days;
or
7.5 Misrepresentations. If any material misrepresentation or misstatement
exists now or hereafter in any warranty or representation set forth herein or in
any certificate delivered to Administrative Agent by any Responsible Officer
pursuant to this Agreement or to induce Administrative Agent or Lender to enter
into this Agreement or any other Loan Document.
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8. LENDER'S RIGHTS AND REMEDIES
8.1 Acceleration of Debt. Upon the occurrence and continuation of an Event
of Default, Lender may, at its election, upon notice (except for an Event of
Default specified under section 7.3, as to which no notice shall be required),
declare the Debt, whether evidenced by this Agreement, by any of the other Loan
Documents, or otherwise, immediately due and payable.
8.2 Remedies Cumulative. Lender's rights and remedies under this Agreement,
the Loan Documents, and all other agreements shall be cumulative. Lender shall
have all other rights and remedies not inconsistent herewith as provided by law
or in equity. No exercise by Lender of one right or remedy shall be deemed an
election, and no waiver by Lender of any Event of Default on Borrower's part
shall be deemed a continuing waiver. No delay by Lender shall constitute a
waiver, election, or acquiescence by it. No waiver by Lender shall be effective
unless in writing signed either by Lender of Administrative Agent. Any such
waiver signed by Administrative Agent on behalf of Lender shall be binding upon
Lender.
9. TERMINATION
9.1 Termination by Lender or Borrower. Either Lender or Borrower may
terminate this Agreement at any time upon delivery of notice of the same to the
other party in accordance with Section 10.
9.2 Effect of Termination. Upon delivery of notice of termination in
accordance with Section 10, this Agreement shall terminate immediately.
Notwithstanding any termination of this Agreement, all of the terms and
provisions of this Agreement shall continue in full force and effect until all
Debt has been paid and performed in full, and no termination shall impair any
right or remedy of Lender, nor shall any such termination relieve Borrower of
any obligation to any Lender until the Debt has been paid in full.
10. NOTICES
Unless otherwise provided in this Agreement, all notices or demands by any
Party relating to this Agreement or any other agreement entered into in
connection herewith shall be in writing and (except for financial statements and
other informational documents which may be sent by first-class mail., postage
prepaid) shall be personally delivered or sent by a recognized, overnight
delivery service or by certified mail, postage prepaid, return receipt
requested, as the case may be, at its addresses set forth below. Notice may also
be given by electronic mail OR other similar means at the electronic mail
address set forth below for each Party provided that proof of delivery of such
notice is obtained or such notice is actually received.
If to Borrower: Domark International Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Lender: Infinite Funding Inc.
US Operations
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ #▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
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Any Party may change the address at which it is to receive notices
hereunder by providing notice in writing to the other Parties in the foregoing
manner.
11. CHOICE OF LAW AND VENUE.
This Agreement shall be governed by, and construed in accordance with, the
internal laws of the State of Texas, without regard to principles of conflicts
of law. Borrower and Lender each hereby submit to the exclusive jurisdiction of
the state and Federal courts locate in ▇▇▇▇▇▇ County, Texas for any dispute
relating to or arising under this Agreement.
12. GENERAL PROVISIONS
12.1 Successors and Assigns. This Agreement shall bind and inure to the
benefit of the respective successors and permitted assigns of each of the
parties; provided, however, that neither this Agreement nor any rights hereunder
may be assigned by Borrower without Lender's prior written consent, which
consent may be granted or withheld in Lender's sole discretion.
12.2 Time of Essence. Time is of the essence for the performance of all
obligations set forth in this Agreement.
12.3 Severability of Provisions; Headings. Each provision of this Agreement
shall be severable from every other provision of this Agreement for the purpose
of determining the legal enforceability of any specific provision. Headings are
set forth in this Agreement for convenience only.
12.4 Amendments in Writing. This Agreement cannot be changed or terminated
orally. All prior agreements, understandings, representations, warranties, and
negotiations between the parties hereto with respect to the subject matter of
this Agreement, if any, are merged into this Agreement.
12.5 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an original, and all of
which, when taken together, shall constitute but one and the same Agreement.
SIGNATURE PAGE FOLLOWS.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed as of the date first above written.
LENDER:
INFINITE FUNDING INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: President
BORROWER:
Domark International, Inc.
By: /s/ R. ▇▇▇▇▇▇ ▇▇▇▇
---------------------------------------
Name: R. ▇▇▇▇▇▇ ▇▇▇▇
Title: Chairman & CEO
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EXHIBIT A BORROWING CERTIFICATE
The undersigned hereby certifies as follows:
I, __________________________ (name), am the duly appointed and acting
_________________ (title) of __________________________________ ("Borrower").
This certificate is delivered pursuant to Section 2.1 of that certain Master
Credit Agreement dated as of______________________ (the "Master Credit
Agreement") among Infinite Funding Inc., as Lender and Borrower. The terms used
in this Borrowing Certificate which are defined in the Master Credit Agreement
have the same meaning herein as ascribed to them therein.
Borrower hereby requests an Advance in the amount of $________________. Borrower
requests that the amount of $___________________ (if blank, the full amount of
the Advance) be deposited as follows:
Name and Address of Bank:
Routing Number:
Account Number:
As of the date of this Borrowing Certificate, all representations and warranties
of Borrower stated in the Master Credit Agreement are true, accurate and
complete in all material respects.
IN WITNESS WHEREOF, this Borrowing Certificate is executed by the undersigned as
of this __________ of _____________________, 2012.
BORROWER
Domark International, Inc.
By: /s/ R. ▇▇▇▇▇▇ ▇▇▇▇
----------------------------------
Name: R. ▇▇▇▇▇▇ ▇▇▇▇
Title: Chairman and CEO
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EXHIBIT B
EVIDENCE OF INDEBTEDNESS
The undersigned, Infinite Funding Inc., Lender under that certain Master
Credit Agreement dated as of _____________________, 2012 (the "Master Credit
Agreement") between Lender and Domark International Inc. as Borrower, hereby
certifies the following as of __________________.
1. During the Borrower's current fiscal quarter (or since the date of the
Credit Agreement, if this Evidence of Indebtedness if the first
Evidence of Indebtedness issued pursuant to the Master Credit
Agreement), Lender has disbursed to Borrower Advances in the aggregate
amount of $______________ (the "Current Indebtedness").
2. The Current Indebtedness accrues simple interest at the rate of eight
percent (8%) per year. The Current Indebtedness is due and payable to
the Lender twelve (12) months from the date of this Evidence of
Indebtedness.
3. This Evidence of Indebtedness does not supersede any prior Evidences
of Indebtedness and is cumulative of any prior Evidences of
Indebtedness.
IN WITNESS WHEREOF, this Evidence of Indebtedness is executed by the undersigned
as of this ________ day of ___________________, 2012.
INFINITE FUNDING INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Chairman and CEO
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